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Exhibit 10.1*
LIMITED LIABILITY COMPANY AGREEMENT OF
LOCKHEED ▇▇▇▇▇▇ CHEMICAL
DEMILITARIZATION SYSTEMS, LLC
This Limited Liability Company Agreement (this "Agreement") of Lockheed
▇▇▇▇▇▇ Chemical Demilitarization Systems, LLC, a Delaware limited liability
company (the "Company"), is made as of June 16, 1997, by and between Lockheed
▇▇▇▇▇▇ Advanced Environmental Systems, Inc., a Delaware corporation (the "LMC
Subsidiary"), and MMT Federal Holdings Inc., a Delaware corporation (the "MMT
Subsidiary"), as members of the Company, and the Persons who become members of
the Company in accordance with the provisions hereof and whose names are set
forth as Members on Exhibit A attached hereto.
WHEREAS, in accordance with the Master Restructuring Agreement, dated
as of June 16, 1997 (the "Master Restructuring Agreement"), by and between
Lockheed ▇▇▇▇▇▇ Corporation, a Maryland corporation ("LMC"), and Molten Metal
Technology, Inc., a Delaware corporation ("MMT"), the LMC Subsidiary and the MMT
Subsidiary desire to form a Delaware limited liability company pursuant to the
Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et seq., as
amended from time to time (the "Delaware Act") by filing a Certificate of
Formation of the Company with the office of the Secretary of State of the State
of Delaware and by entering into this Agreement; and
WHEREAS, the parties hereto desire that the Company be governed by the
Delaware Act and this Agreement.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereby agree as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1. DEFINITIONS. As used in this Agreement, the following
capitalized terms have the following meanings:
"Additional Capital Contribution" means any Capital Contribution
effected after the date hereof by any Member pursuant to Section 4.2.
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person. As used in
this definition and in Section 3.1(c), the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
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* Confidential treatment has been requested for certain portions of this Exhibit
10.1.
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securities, by contract or otherwise with respect to any Person, and any other
Person controlling, controlled by or under common control with such Person.
"Agreement" means this Limited Liability Company Agreement of the
Company, including all exhibits and schedules hereto, as amended, restated or
supplemented from time to time.
"Bankruptcy" means, with respect to any Person (i) the filing by such
Person of a voluntary petition seeking liquidation, reorganization, arrangement
or readjustment, in any form, of its debts under Title 11 of the United States
Code, or corresponding provisions of future laws (or any other federal or state
insolvency law), (ii) the filing by such Person of an answer consenting to or
acquiescing in any such petition, (iii) the making by such Person of an
assignment for the benefit of its creditors or the admission by such Person in
writing of its inability to pay its debts as they mature, (iv) the filing of any
involuntary petition against such Person under Title 11 of the United States
Code (or corresponding provisions of future laws), an application for the
appointment of a receiver for the assets of such Person, or an involuntary
petition seeking liquidation, reorganization, arrangement or readjustment of its
debts under any other federal or state insolvency law, provided the same shall
not have been vacated, set aside or stayed within a 60-day period after the
occurrence of such event, or (v) the entry against such Person of a final
non-appealable order for relief under any bankruptcy, insolvency or similar law
now or hereafter in effect.
"B&P Costs" has the meaning set forth in Section 3.1(b).
"Board" means the Board of Directors of the Company with such powers
and duties as are described in Article V of this Agreement.
"Capital Account" means a separate account maintained for each Member
in the manner described in this paragraph. There shall be credited to each
Member's Capital Account (i) its Capital Contributions; (ii) its allocable share
of Company profits, including any income or gain that is exempt from federal
income taxation; (iii) the amount of any Company liabilities that are assumed by
such Member or that are secured by any Company property distributed to such
Member; and (iv) any other items required by Treasury Regulations
Section 1.704-l(b)(2)(iv). There shall be charged against each Member's Capital
Account (i) the amount of cash and the fair market value of other property
distributed to it from the Company; (ii) its allocable share of Company losses,
including expenditures that are neither deductible nor properly chargeable to
capital account under Section 705(a)(2)(B) of the Code or are treated as such
expenditures under Treasury Regulations Section 1.704-1(b)(2)(iv)(i); (iii) the
amount of any liabilities of such Member that are assumed by the Company or that
are secured by any property contributed by such Member to the Company; and (iv)
any other items required by Treasury Regulations Section 1.704-l(b)(2)(iv). In
connection therewith, the Board may make adjustments to the Capital Accounts of
the Members in a manner consistent with Treasury Regulations Section
1.704-l(b)(2)(iv)(f) upon the occurrence of any event described in subparagraph
(5) of such Regulations. Any reference in this Agreement to the Capital Account
of a then Member shall include the Capital Account of any prior Member in
respect of the Interest of such then Member.
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"Capital Contribution" means the amount of cash and the fair market
value of all other property contributed to the Company by a Member in its
capacity as such at any point in time, including any Additional Capital
Contributions. All such amounts contributed shall be reflected on the books and
records of the Company. Any reference in this Agreement to the Capital
Contribution of a then Member shall include a Capital Contribution previously
made by any Member in respect of the Interest of such then Member. The licenses
granted by MMT pursuant to the MMT License Agreement shall not constitute a
Capital Contribution by the MMT Subsidiary (or be credited to the Capital
Account of the MMT Subsidiary) for purposes of this Agreement. However, the
immediately preceding sentence shall not prevent the Company, MMT or the MMT
Subsidiary from treating such licenses as a capital contribution for accounting
purposes to the extent required by generally accepted accounting principles.
"Catalytic Extraction Processing" or "CEP" means the processes, methods
and systems (including all intellectual and intangible and tangible property
associated therewith and including all aspects of accepting Feedstocks,
reactions within a CEP Plant, and handling Recovered Resources), owned or used
by MMT, directed to the processing of Feedstocks by introducing the Feedstocks
to a processing vessel containing at least one liquefied metal.
"CEP Plant" means the plant, equipment and other facilities necessary
to perform, operate and maintain CEP on a commercial basis (or, in the case of
any so-called "demonstration" facility, on the basis generally provided in the
applicable demonstration program).
"Certificate" means the Certificate of Formation of the Company and any
and all amendments thereto and restatements thereof filed on behalf of the
Company with the office of the Secretary of State of the State of Delaware.
"Chem Demil Market" has the meaning set forth in Section 3.1(a).
"Chem Weapons Feedstocks" means (i) bombs, rockets, artillery shells,
mortar shells, explosives and other munitions containing (or formerly
containing) one or more "chemical weapons agents" as defined in the Chemical
Weapons Convention (formally known as the Convention on the Prohibition of the
Development, Production, Stockpiling and Use of Chemical Weapons and their
Destruction), adopted September 3, 1992 at the Conference on Disarmament at
Geneva, and opened for signature on January 13, 1993 in Paris), and (ii) bulk
stockpiles of such chemical weapons agents.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any corresponding federal tax statute enacted after the date of this
Agreement. A reference herein to a specific Section of the Code refers not only
to such specific Section but also to any corresponding provision of any federal
tax statute enacted after the date of this Agreement, as such specific Section
or such corresponding provision is in effect on the date of application of the
provisions of this Agreement containing such reference.
"Company" means Lockheed ▇▇▇▇▇▇ Chemical Demilitarization Systems, LLC,
the limited liability company governed by the Delaware Act and this Agreement.
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"Covered Person" means any Member, any Affiliate of a Member, or any
Director, or any officers, directors, shareholders, partners, employees,
representatives or agents of a Member or their respective Affiliates, or any
employee or agent of the Company or its Affiliates.
"Delaware Act" means the Delaware Limited Liability Company Act, 6 Del.
C. Section 18-101, et seq., as amended from time to time and any successor
statute.
"Director" means any natural person designated by the LMC Subsidiary or
the MMT Subsidiary, as the case may be, as a member of the Board pursuant to the
provisions of this Agreement. Unless otherwise unanimously agreed in writing by
the LMC Subsidiary and the MMT Subsidiary, the LMC Subsidiary shall designate
three (3) Directors and the MMT Subsidiary shall designate three (3) Directors.
A Director shall be deemed to be a "manager" of the Company within the meaning
of the Delaware Act.
"Dispute Resolution Agreement" means the Second Amended and Restated
Dispute Resolution Agreement, dated as of June 16, 1997, by and among LMC, MMT,
the MMT Subsidiary, the LMC Subsidiary, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Environmental Holdings
Inc., M4 Environmental L.P., M4 Environmental Management Inc., LMC-MMT Strategic
Alliance Committee, LLC, and the Company, as in effect from time to time.
"Feedstocks" means, with respect to any CEP Plant, the wastes,
industrial by-products and other materials to be processed by such CEP Plant.
"Fiscal Year" means (i) the period commencing on the effective date of
this Agreement and ending on December 31, 1997, (ii) any subsequent twelve (12)
month period commencing on January 1 and ending on December 31, and (iii) the
period commencing on the immediately preceding January 1 and ending on the date
on which all Company assets have been distributed to the Members pursuant to
Article X.
"Intellectual Property" has the meaning set forth in the MMT License
Agreement.
"Interest" means a Member's limited liability company interest in the
Company, which represents such Member's share of the profits and losses of the
Company and a Member's right to receive distributions of the Company's assets in
accordance with the provisions of this Agreement and the Delaware Act.
"Liquidator" has the meaning set forth in Section 10.1(b).
"LMC" has the meaning set forth in the preamble.
"LMC Subsidiary" has the meaning set forth in the preamble.
"Master Restructuring Agreement" has the meaning set forth in the
preamble.
"Member" means each of the LMC Subsidiary and the MMT Subsidiary and
includes any Person admitted as an additional Member or a substitute Member
pursuant to the provisions of
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this Agreement, in such Person's capacity as a member of the Company, and
"Members" means two (2) or more such Persons when acting in their capacities as
members of the Company. For purposes of the Delaware Act, the Members shall
constitute one (1) class or group of Members.
"MMT" has the meaning set forth in the preamble.
"MMT License Agreement" means the License Agreement, dated as of June
16, 1997, by and among LMC, MMT and the Company, as in effect from time to time.
"MMT Subsidiary" has the meaning set forth in the preamble.
"Officer" means an officer of the Company.
"Percentage Interest" means the Interest of a Member in the Company
expressed as a portion of one hundred percent, as set forth on Exhibit A
attached hereto. The Percentage Interest of a Member may be adjusted from time
to time with the unanimous written consent of all of the Members and the,
adoption, with the Members' unanimous consent, of amendments to appropriate
provisions of this Agreement, including, without limitation, Articles VIII, IX
and X. Without limiting the generality of the immediately preceding sentence, as
contemplated by Section 3.1(b), the Members may, as a result of a particular
Company project, unanimously consent to adjust their respective Percentage
Interests, either with respect to such project only or with respect to the
Company as a whole, but any such adjustment shall be conditioned upon the
Members' unanimous consent to amend appropriate provisions of this Agreement,
including, without limitation, Articles VIII, IX and X.
"Person" means any individual, partnership, corporation, association,
trust, limited liability company, joint venture, unincorporated organization or
any government, governmental department or agency or political subdivision
thereof.
"Recovered Resources" means the element and compounds produced by a CEP
Plant (whether or not produced through the use of reactants) that are suitable
for use or sale.
"Related Agreements" means this Agreement and any other agreement that
specifies that it is a Related Agreement for purposes of this Agreement or the
Master Restructuring Agreement.
"Secretary" means the natural person appointed by the Board as the
Secretary of the Company, who shall perform the duties described in Section 6.2.
"Section 704(c) Difference" has the meaning set forth in Section 9.4.
"Subsidiary" has the meaning set forth in the Master Restructuring
Agreement.
"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as amended and in effect from
time to time.
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SECTION 1.2. HEADINGS. The headings and subheadings in this Agreement
are included for convenience and identification only and in no way are intended
to describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
ARTICLE II
FORMATION OF COMPANY, ETC.
SECTION 2.1. FORMATION.
(i) The Members hereby agree to form the Company as a limited
liability company under and pursuant to the provisions of the Delaware Act and
agree that the rights, duties and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided herein.
(ii) Upon the execution of this Agreement or a counterpart of
this Agreement and the filing of the Certificate pursuant to Section 2.1(iv),
each of the LMC Subsidiary and the MMT Subsidiary shall be admitted as Members.
(iii) The name and mailing address of each Member, the agreed
value of the amount contributed to the Company and the Percentage Interest of
each Member shall be as listed on Exhibit A attached hereto. The Secretary shall
be required to update Exhibit A from time to time as necessary to accurately
reflect the information therein. Any amendment or revision to Exhibit A made in
accordance with this Agreement shall not be deemed an amendment to this
Agreement. Any reference in this Agreement to Exhibit A shall be deemed to be a
reference to Exhibit A as amended and in effect from time to time.
(iv) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., as an authorized person, within the
meaning of the Delaware Act, shall execute, deliver and file the Certificate
with the Secretary of State of the State of Delaware. Upon the filing of the
Certificate with the Secretary of State of the State of Delaware, his powers as
an authorized person shall cease and the Secretary of the Company shall
thereafter be designated as an authorized person within the meaning of the
Delaware Act.
SECTION 2.2. NAME. The name of the Delaware limited liability company
formed hereby is Lockheed ▇▇▇▇▇▇ Chemical Demilitarization Systems, LLC. The
business of the Company may be conducted upon compliance with all applicable
laws under any other name designated by the Board.
SECTION 2.3. PRINCIPAL PLACE OF BUSINESS. The principal place of
business of the Company shall be located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. The Board may, at any time, change the principal
place of business of the Company and shall give notice thereof to the Members.
SECTION 2.4. REGISTERED AGENT AND OFFICE. The registered agent for
service of process on the Company in the State of Delaware shall be The
Corporation Trust Company, Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the
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registered office of the Company in the State of Delaware shall be c/o The
Corporation Trust Company at the same address. The Board may, at any time,
change the registered agent of the Company or the location of such registered
office and shall give notice thereof to the Members.
SECTION 2.5. TERM. The term of the Company shall commence upon the
filing of the Certificate with the Secretary of State of the State of Delaware
and shall continue until April 30, 2002, unless the Company is sooner dissolved
before such date in accordance with the provisions of this Agreement. The
Members may extend the term of the Company by the unanimous written consent of
the Members, which consent may be granted or withheld in the sole and absolute
discretion of each Member. The existence of the Company as a separate legal
entity shall continue until the cancellation of the Company's Certificate in the
manner required by the Delaware Act.
SECTION 2.6. QUALIFICATION IN OTHER JURISDICTIONS. The Board shall
cause the Company to be qualified, formed or registered to the extent required
in any jurisdiction in which the Company transacts business including under
assumed or fictitious name statutes if deemed advisable. The Secretary or a
member of the Board as an "authorized person" within the meaning of the Delaware
Act, shall execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for the Company to be qualified to do business
in a jurisdiction in which the Company may wish to conduct business.
ARTICLE III
PURPOSES AND POWERS OF THE COMPANY
SECTION 3.1. PURPOSES.
(a) GENERAL PURPOSES. The purposes of the Company are (i)
directly, or indirectly through the ownership of interests in other entities, to
engage in the processing of Chem Weapons Feedstocks worldwide (the "Chem Demil
Market"), and (ii) to engage in all related activities arising therefrom or
relating thereto or necessary, desirable, advisable, convenient, incidental or
appropriate in connection therewith as the Board may from time to time
determine.
(b) INTENTION OF MEMBERS. The LMC Subsidiary shall take the
lead in marketing and business development opportunities, and shall have final
approval over which projects the Company elects to bid. The Company shall pursue
the Chem Demil Market using multiple technologies to offer the best value to the
customer. The Company may utilize CEP or any other technology. The Company shall
pursue particular market opportunities either directly or through separate
project entities created by the Company or the Members for particular projects
or through prime/subcontract relationships created for particular projects. Each
Member shall be responsible for its own personnel costs and marketing costs,
including bid and proposal costs ("B&P Costs"), it being understood that B&P
Costs may be recovered in whole or in part if a contract is awarded to the
Company, subject to the mutual advance agreement of the Members and final audit.
Except as provided in the two (2) immediately following sentences, ownership,
funding, profits and losses with respect to each project of the Company shall be
shared on a
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50/50 basis, all Capital Contributions shall be made in equal shares by the LMC
Subsidiary and the MMT Subsidiary and the Percentage Interest of each of the LMC
Subsidiary and the MMT Subsidiary shall be fifty percent (50%). However, in
connection with a particular Company project the Members may decide to vary this
50/50 relationship in one or more respects based on the technology selected for
such project, the respective financial commitments made for such project by the
Members and the amount of the Capital Contribution each Member is willing to
make for such project. In the event that either the LMC Subsidiary or the MMT
Subsidiary proposes any such variation in the 50/50 relationship as a result of
a project to be performed by the Company (as distinguished from a project to be
performed by a separate project entity created by the Company or the Members or
a project to be performed through a prime/subcontract relationship), before the
Company may undertake such a project, this Agreement shall be amended with the
unanimous consent of the Members so as to reflect the understanding and
agreement of the Members with respect to such variation in the 50/50
relationship, including, without limitation, appropriate amendments to Articles
VIII, IX and X, and, as provided in the definition of "Percentage Interest"
contained in Section 1.1, to reflect adjustments in the respective Percentage
Interests of the Members, either with respect to such project only or with
respect to the Company as a whole. The Members acknowledge that their intent is
to structure these relationships so as to maximize the competitive position of
the Company and its projects and the likelihood of Company success.
(c) CHEM DEMIL EQUIPMENT AND TECHNOLOGY. To the extent that
either LMC or MMT or any Affiliate controlled by either of them owns or controls
equipment or technology that can be sold in the Chem Demil Market, in the event
that such Person or such Affiliate determines to sell or license such equipment
or technology for use in the Chem Demil Market for the Treatment (as defined in
the Master Restructuring Agreement) or Recycling (as defined in the Master
Restructuring Agreement) of Chem Weapons Feedstocks, such Person shall, or cause
its applicable Affiliate to, appoint the Company to act as the exclusive
distributor for sale to third parties of such equipment or technology. Any
profits realized by the Company in connection with such distribution activity
shall be shared equally by the Members unless they agree otherwise.
(d) ABILITY OF MEMBERS TO ACQUIRE COMPETING BUSINESSES. The
intent of the Members is that either initial Member or its Affiliates will be
free to acquire other businesses at any time even if any such acquired business
would include a chemical weapons demilitarization line of business. However, as
required in Section 11.3 of the Master Restructuring Agreement, such acquired
business will be required to pursue the Chem Demil Market through the Company
for the term of the Company, as provided in Section 2.5.
(e) EXCLUSIVITY. Each of the Members shall comply with the
provisions of Section 11.3 of the Master Restructuring Agreement.
SECTION 3.2. POWERS.
(a) SPECIFIC POWERS OF COMPANY. Subject to Section 5.14, the
Company, and the Board on behalf of the Company, shall have the power and
authority to take any and all
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actions necessary, appropriate, proper, advisable, incidental or convenient to
or for the furtherance of the purposes set forth in Section 3.1, including, but
not limited to, the power:
(i) to conduct its business, carry on its operations
and have and exercise the powers granted to a limited
liability company by the Delaware Act in any state, territory,
district or possession of the United States, or in any foreign
country, that may be necessary, convenient or incidental to
the accomplishment of the purposes of the Company;
(ii) to enter into, perform and carry out contracts
of any kind, including, without limitation, contracts with any
Member, any Affiliate thereof, or any agent or Affiliate of
the Company necessary to, in connection with, convenient to,
or incidental to the accomplishment of the purposes of the
Company;
(iii) to lend money to, borrow money from, act as
surety, guarantor or endorser for, provide collateral for, and
transact other business with third parties including Members
and Affiliates of the Company and the Members;
(iv) to purchase, take, receive, subscribe for or
otherwise acquire, own, hold, vote, use, employ, sell,
mortgage, lend, pledge, or otherwise dispose of, and otherwise
use and deal in and with, shares or other interests in or
obligations of domestic or foreign corporations, associations,
general or limited partnerships (including, without
limitation, the power to be admitted as a partner thereof and
to exercise the rights and perform the duties created
thereby), trusts, limited liability companies (including,
without limitation, the power to be admitted as a member or
appointed as a manager thereof and to exercise the rights and
perform the duties created thereof), or individuals or direct
or indirect obligations of the United States or of any
government, state, territory, governmental district or
municipality or of any instrumentality of any of them;
(v) to lend money for its proper purpose, to invest
and reinvest its funds, to take and hold real and personal
property for the payment of funds so loaned or invested;
(vi) to ▇▇▇ and be sued, complain and defend, and
participate in administrative or other proceedings, in its
name;
(vii) to appoint employees and agents of the Company,
including Officers, and define their duties and fix their
compensation;
(viii) to employ or retain such agents, employees,
managers, accountants, attorneys, consultants and other
Persons necessary or appropriate to carry out the business and
affairs of the Company, and to pay such fees, expenses,
salaries and wages and other compensation as the Board shall
determine;
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(ix) to indemnify any Person in accordance with the
Delaware Act and to obtain any and all types of insurance;
(x) to cease its activities and cancel its
Certificate;
(xi) to negotiate, enter into, renegotiate, extend,
renew, terminate, modify, amend, waive, execute, acknowledge
or take any other action with respect to any lease, contract
or security agreement in respect of any assets of the Company;
(xii) to borrow money and issue evidences of
indebtedness, and to secure the same by a mortgage, pledge or
other lien on the assets of the Company;
(xiii) to pay, collect, compromise, litigate,
arbitrate or otherwise adjust or settle any and all other
claims or demands of or against the Company or to hold such
proceeds against the payment of contingent liabilities; and
(xiv) to make, execute, acknowledge and file any and
all documents or instruments necessary, convenient or
incidental to the accomplishment of the purposes of the
Company.
(b) CERTAIN RELATED AGREEMENTS. The Company may enter into and
perform the MMT License Agreement, the Master Restructuring Agreement and the
Dispute Resolution Agreement without any further act, vote or approval of any
Member, Director or Officer, notwithstanding any other provision of this
Agreement, the Delaware Act or other applicable law, rule or regulation.
ARTICLE IV
MEMBERS
SECTION 4.1 MEMBERS; CAPITAL. Each Member has contributed or is deemed
to have contributed to the Company as its initial Capital Contribution the
amount of money set forth opposite such Member's name on Exhibit A attached
hereto. The agreed value of the Capital Contributions made or deemed to have
been made by each Member shall be set forth on Exhibit A. No Member shall have
any personal liability for the repayment of the Capital Contribution of any
other Member, and no Member shall have any obligation to fund or restore any
deficit in its Capital Account.
SECTION 4.2. ADDITIONAL CAPITAL CONTRIBUTIONS. No Member shall be
required to make any Additional Capital Contribution to the Company. However, a
Member may, subject to the provisions of Section 3.1(b), make Additional Capital
Contributions to the Company with the written consent of all of the other
Members. The provisions of this Agreement, including without limitation, this
Section 4.2, are intended solely to benefit the Members and, to the fullest
extent permitted by law, shall not be construed as conferring any benefit upon
any creditor of the Company other than the Members, and no such creditor of the
Company other than the Members
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shall be a third-party beneficiary of this Agreement, and no Member or Director
shall have any duty or obligation to any creditor of the Company to issue any
call for capital pursuant to this Agreement.
SECTION 4.3. BORROWINGS AND LOANS. If any Member shall lend any monies
to the Company, the amount of any such loan shall not (i) constitute an increase
in the amount of such Member's Capital Contributions, (ii) affect in any way
such Member's share of the profits, losses, and distributions of the Company, or
(iii) be reflected in such Member's Capital Account. No Member shall be required
to lend any monies to the Company without its written consent, which consent may
be given or withheld in the sole and absolute discretion of such Member.
SECTION 4.4. NO LIABILITY OF MEMBERS FOR OBLIGATIONS OF THE COMPANY.
Except as otherwise provided by the Delaware Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and no
Member, Director, Officer or Affiliate of a Member shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Member, Director, Officer or Affiliate of a Member.
SECTION 4.5. NO REQUIREMENT FOR ANNUAL MEETINGS. There is no
requirement that an annual meeting of the Members be held unless requested in
writing by the Board or any Member.
SECTION 4.6. SPECIAL MEETINGS. Meetings of Members for any purpose or
purposes may be called at any time by the Board or any Member.
SECTION 4.7. NOTICE OF MEETINGS. Whenever Members are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and the
purpose or purposes for which the meeting is called. Unless otherwise provided
by law or this Agreement, the written notice of any meeting shall be given not
less than ten (10) nor more than sixty (60) days before the date of the meeting
to each Member. If mailed, such notice shall be deemed to be given when received
by the Member at its address as it appears on the records of the Company.
SECTION 4.8. ADJOURNMENTS. Any meeting of Members may adjourn from time
to time to reconvene at the same or some other place, and notice need not be
given of any such adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken. At the adjourned meeting the
Company may transact any business that might have been transacted at the
original meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given to each Member of record entitled
to vote at the meeting.
SECTION 4.9. QUORUM. Except as otherwise provided by law or this
Agreement, at each meeting of Members the presence in person or by proxy of the
holders of all Percentage Interests at the meeting shall be necessary to
constitute a quorum. In the absence of a quorum, the Members so present may, by
majority vote, adjourn the meeting from time to time in the manner provided in
Section 4.8 until a quorum shall attend.
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SECTION 4.10. UNANIMOUS VOTE OF MEMBERS REQUIRED. Except for the
designation of Directors as provided in Section 5.2, all matters voted on by the
Members shall require the unanimous affirmative vote of all of the Members.
SECTION 4.11. VOTING; PROXIES. Except as otherwise provided by this
Agreement, each Member entitled to vote at any meeting of Members shall be
entitled to vote its entire Percentage Interest. Each Member entitled to vote at
a meeting of Members or to express consent or dissent to action by the Company
in writing without a meeting may authorize another person or persons to act for
it by proxy. A Member may revoke any proxy that is not irrevocable by attending
the meeting and voting in person or by filing an instrument in writing revoking
the proxy or by delivering a proxy in accordance with applicable law bearing a
later date to the Secretary of the Company.
SECTION 4.12. ACTION BY WRITTEN CONSENT OF MEMBERS. Unless otherwise
provided in this Agreement, any action required or permitted to be taken at any
meeting of the Members (including the designation by the LMC Subsidiary and the
MMT Subsidiary of Directors) may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders of outstanding Interests (or
by the LMC Subsidiary and the MMT Subsidiary in connection with the designation
of Directors) having not less than the minimum number of votes or Percentage
Interests that would be necessary to authorize or take such action at a meeting
at which all Interests entitled to vote thereon were present and voted and shall
be delivered (by hand or by certified or registered mail, return receipt
requested, or by overnight courier service such as Federal Express or via
telecopier) to a Director designated by the LMC Subsidiary and a Director
designated by the MMT Subsidiary. Prompt notice of the taking of the action by
the Company or any Member without a meeting by less than unanimous written
consent of the Members shall be given to those Members who have not consented in
writing.
SECTION 4.13. CONDUCT OF MEETINGS. The Board may adopt by resolution
such rules and regulations for the conduct of the meeting of Members as it shall
deem appropriate. Members may participate in a meeting of the Members by means
of conference telephone or similar communications equipment, provided all
persons participating in the meeting can hear each other, and such participation
in a meeting shall constitute presence in person at the meeting. If all the
participants are participating by conference telephone or similar communications
equipment, the meeting shall be deemed to be held at the principal place of
business of the Company.
SECTION 4.14. POWERS OF MEMBERS. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement. The Members shall also have the power to
authorize the Board, by unanimous vote of the Members, to possess and exercise
any right or power not already vested in the Board pursuant to Article V or any
other provision of this Agreement. Except as otherwise specifically provided
herein, the Members shall have no power or authority or right to bind the
Company.
SECTION 4.15. PARTITION. Each Member waives any and all rights that it
may have to maintain an action for partition of the Company's property.
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SECTION 4.16. RESIGNATION. Except as provided herein, a Member may not
resign from the Company prior to the dissolution and winding up of the Company.
SECTION 4.17. MEMBERS' LACK OF AUTHORITY TO BIND THE COMPANY. The
Members hereby consent to the exercise by the Board of the powers conferred by
this Agreement. Except as otherwise specifically provided herein, no Member
shall have any power or authority or right to act for or bind the Company.
Without limiting the generality of the foregoing, no Member shall have any power
or authority or right to act for or bind the Company with respect to any matter
unless previously authorized by the Board or, where required pursuant to Section
5.14, by the Members.
ARTICLE V
MANAGEMENT
SECTION 5.1. BOARD OF DIRECTORS. Subject to the rights of the Members
as set forth herein, including Section 5.14, the business and affairs of the
Company shall be managed by or under the direction of the Board. The Board shall
have full and complete authority, power and discretion to manage and control the
business and affairs of the Company, to make all decisions affecting the
business and affairs of the Company and to take all such actions as it deems
necessary or appropriate to accomplish the purposes of the Company as set forth
herein, including, without limitation, Article III.
SECTION 5.2. NUMBER; QUALIFICATIONS. The Board shall consist of six (6)
Directors. Directors need not be Members. Unless otherwise unanimously agreed by
all of the Members, the LMC Subsidiary shall designate three (3) Directors and
the MMT Subsidiary shall designate three (3) Directors, each of whom shall hold
office until his or her successor is designated by the Member that designated
such Director. The Board shall initially consist of the persons named as
Directors by the Members on Exhibit B attached hereto. Each Director shall serve
at the pleasure of the Member that designated such Director and may be replaced
or removed at any time, with or without cause, by the Member that designated
such Director. Any Director may resign at any time upon written notice to the
Company. Any vacancy occurring in the Board for any cause shall promptly be
filled by the Member that designated the Director who is no longer serving.
SECTION 5.3. FIDUCIARY DUTIES OF DIRECTORS. To the fullest extent
permitted by law, including Section 18-1101(c) of the Delaware Act, each
Director shall be deemed an agent of the Member that designated such Director
and shall have no duty (fiduciary or otherwise) to the Company or to any other
Member. Each Member, by execution of this Agreement, agrees to, consents to, and
acknowledges the delegation of powers and authority to the Directors, and to
actions and decisions of the Directors within the scope of the Directors'
authority as provided herein.
SECTION 5.4. REGULAR MEETINGS. Regular meetings of the Board may be
held at such places within or without the State of Delaware and at such times as
the Board may from time to time determine, and if so determined notices thereof
need not be given. The Board shall meet as
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often as the Directors deem necessary, presently contemplated to be four (4)
times per year. Meetings may be conducted in person or by telephone or in any
other manner agreed to by the Board. Meetings of the Board may be attended by
other representatives of the Members and their Affiliates and other persons
related to the Company as agreed to from time to time by the Board.
SECTION 5.5. SPECIAL MEETINGS. Special meetings of the Board may be
held at any time or place within or without the State of Delaware whenever
called by any Member or any Director. Notice of a special meeting of the Board
shall be given by the person or persons calling the meeting at least twenty-four
(24) hours before such meeting.
SECTION 5.6. TELEPHONIC MEETINGS PERMITTED. Directors, or any committee
of Directors designated by the Board, may participate in a meeting thereof by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
If all the participants are participating by conference telephone or similar
communications equipment, the meeting shall be deemed to be held at the
principal place of business of the Company.
SECTION 5.7. QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the
Board a quorum for the transaction of business shall be the presence of an equal
number of Directors elected by the LMC Subsidiary and the MMT Subsidiary. Except
in cases in which this Agreement otherwise provides, the vote of a majority of
the Directors present at a meeting at which a quorum is present shall be the act
of the Board. Each Director shall have one (1) vote.
SECTION 5.8. ORGANIZATION. The Secretary shall act as secretary of each
meeting of the Board, but in the Secretary's absence the Board may appoint any
person to act as secretary of the meeting.
SECTION 5.9. ACTION BY THE BOARD WITHOUT A MEETING. Unless otherwise
restricted by this Agreement, any action required or permitted to be taken at
any meeting of the Board, or of any committee thereof, may be taken without a
meeting if all Directors, or all members of such committee of Directors, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or such committee, as the case may
be.
SECTION 5.10. COMMITTEES. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of two (2) or more of the Directors. The Board may designate one (1) or
more Directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the Director or Directors thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another Director to act at the
meeting in place of such absent or disqualified member of such committee. Any
such committee, to the extent permitted by law and to the extent provided in the
resolution of the Board creating such committee, shall have and may exercise all
the powers and authority of the Board in the management of the business and
affairs of the Company. On all committees of the Board there shall be an equal
number of
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Directors designated by the LMC Subsidiary and an equal number of Directors
designated by the MMT Subsidiary.
SECTION 5.11. COMMITTEE RULES. Unless the Board otherwise provides,
each committee designated by the Board may make, alter and repeal rules for the
conduct of such committee's business. In the absence of such rules, each
committee shall conduct its business in the same manner as the Board conducts
its business pursuant to this Agreement.
SECTION 5.12. BOARD COMPENSATION. Directors shall not be entitled to
any compensation for their services as members of the Board.
SECTION 5.13. DIRECTOR'S POWER TO BIND. No Director shall have any
power or authority or right to act for or bind the Company with respect to any
matter unless previously authorized by the Board or, where required pursuant to
Section 5.14, by the Members.
SECTION 5.14. MATERIAL TRANSACTIONS/DUTIES OF MEMBERS.
(a) CERTAIN MATTERS REQUIRING UNANIMOUS APPROVAL OF THE
MEMBERS. Notwithstanding any other provision of this Agreement, the following
matters shall require the unanimous written approval of the Members, and no such
action shall be taken by the Company, the Board, any Director or Officer on
behalf of the Company, unless, until, and to the extent that, the unanimous
written approval of all of the Members is obtained:
(i) amending this Agreement;
(ii) increasing the amount of Capital Contributions
required of any Member or changing any Member's Percentage
Interest;
(iii) admitting any new Member upon the issuance of
new Interests in the Company;
(iv) permitting the transfer by a Member of its
Interest in the Company;
(v) pursuing an initial public offering in connection
with the Company or its assets;
(vi) any acquisitions (whether by purchase, merger or
otherwise) of capital stock or other equity interests of any
Person or any acquisition (whether by purchase of assets or
otherwise) of assets of any Person, other than the acquisition
of assets (not constituting a business, division or line of
business of any Person) in the ordinary course of the
Company's business;
(vii) dissolving the Company pursuant to Section
10.1(a)(iv);
(viii) selling all or any substantial part of the
assets of the Company;
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(ix) causing the Company to merge with or consolidate
into another limited liability company or other business
entity (as defined in Section 18-209(a) of the Delaware Act);
(x) causing the Company to convert into any other
business entity (as defined in Section 18-214 of the Delaware
Act);
(xi) commencing a voluntary proceeding seeking
reorganization or other relief with respect to the Company
under any bankruptcy or similar law; or
(xii) causing the Company to engage in any material
transaction between the Company and any Member not
contemplated by the Master Restructuring Agreement.
(b) DUTIES OF MEMBERS. Each Member and its Affiliates, in
connection with the business and affairs of the Company, and in exercising such
Member's discretion under this Agreement, including Section 5.14(a), shall to
the fullest extent permitted by Section 18-1101(c) of the Delaware Act, be
entitled to consider such interests and factors as such Member desires,
including its own interest and the interest of its Affiliates, and shall have no
duty or obligation to give any consideration to any interest of, or factors
affecting, the Company or any other Member.
ARTICLE VI
OFFICERS
SECTION 6.1. OFFICERS. The Officers of the Company shall be chosen by
the Board, except as otherwise provided herein. Except as otherwise provided
herein, the Officers shall have such powers and duties in the management of the
Company as may be prescribed in a resolution by the Board and, to the extent not
so provided, as generally pertain to their respective offices as if the Company
were a corporation governed by the General Corporation Law of the State of
Delaware, subject to the control of the Board. The Board may require any
Officer, agent or employee to give security for the faithful performance of his
or her duties. Each Officer shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any
Officer may resign at any time upon written notice to the Company. The Board may
remove any Officer with or without cause at any time. Any number of offices may
be held by the same person. Any vacancy occurring in an office of the Company by
death, resignation, removal or otherwise may be filled for the unexpired portion
of the term by the Board at any regular or special meeting of the Board.
SECTION 6.2. THE SECRETARY AND ASSISTANT SECRETARY. The Secretary shall
attend all meetings of the Board and all meetings of the Members and record all
of the proceedings of the meetings of the Company and of the Board in a book to
be kept for that purpose and shall perform like duties for the standing
committees when required. The Secretary shall give, or cause to be given, notice
of all meetings of the Members and special meetings of the Board, and shall
perform such other duties as may be prescribed by the Board, or the President if
any, under whose supervision the Secretary shall be. The Assistant Secretary or,
if there be more than one,
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the Assistant Secretaries in the order determined by the Board (or if there be
no such determination, then in the order of their election) shall, in the
absence of the Secretary, or in the event of the Secretary's inability to act,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties and have such other powers as the Board, or the President if
any, may from time to time prescribe.
SECTION 6.3. THE TREASURER AND ASSISTANT TREASURER. The Treasurer, if
any, shall have the custody of the Company's funds and securities and shall keep
full and accurate accounts of receipts and disbursements and books belonging to
the Company and shall deposit all monies and other valuable effects in the name
and to the credit of the Company in such depositories as may be designated by
the Board. The Treasurer shall disburse the funds of the Company as may be
ordered by the Board or the President, taking proper vouchers for such
disbursements, and shall render to the Board, at its regular meetings, or when
the Board so requires, an account of all the Treasurer's transactions and of the
financial condition of the Company. The Assistant Treasurer or, if there shall
be more than one, the Assistant Treasurers in the order determined by the Board
(or if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer, or in the event of the Treasurer's
inability to act, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the Board, or
the President if any, may from time to time prescribe.
SECTION 6.4. OFFICERS AS AGENTS. The Officers, to the extent of their
powers set forth in this Agreement, are agents of the Company for the purpose of
the Company's business, and the actions of the Officers taken in accordance with
their respective powers set forth in this Agreement shall bind the Company.
Without limiting the generality of the foregoing, no Officer shall have any
power or authority or right to act for or bind the Company with respect to any
matter unless previously authorized by the Board or, where required pursuant to
Section 5.14, by the Members.
SECTION 6.5. EXECUTION OF INSTRUMENTS; RELIANCE BY THIRD PARTIES. Any
Person dealing with the Company or any Member, Director or Officer in connection
with the business of the Company, may rely upon a certificate signed by at least
one Director designated by the LMC Subsidiary and one Director designated by the
MMT Subsidiary as to:
(i) the identify of a Member, Director or Officer;
(ii) the existence or non-existence of any fact or
facts that constitute a condition precedent to acts by the
Board, the Members or the Officers, or in any other matter
relating to the affairs of the Company;
(iii) the Persons who are authorized to execute and
deliver any instrument or document of, or on behalf of, the
Company; or
(iv) any act or failure to act by the Company or as
to any other matter whatsoever involving the Company or any
Member, Director or Officer.
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ARTICLE VII
TRANSFERABILITY OF MEMBER INTERESTS
SECTION 7.1. RESTRICTIONS ON TRANSFER.
(a) No Member shall have the right to dispose of, sell,
alienate, assign, participate, subparticipate, encumber, or otherwise transfer
all or any part of its Interest (other than an assignment by operation of law,
such as a merger), unless prior to such transfer the transferee is approved in
writing by all of the other Members acting in their sole and absolute
discretion.
(b) The transferee of the Interest of a Member may become a
substituted Member only upon the terms and conditions set forth in this Article
VII. Each Member shall have the power, in its sole discretion, to admit or to
refuse to admit as substituted Members transferees who acquire the Interest, or
any part thereof, of a Member hereunder. Except as otherwise provided in this
Article VII, the failure or refusal of the Members to admit an assignee as a
substituted Member shall not affect the right of such assignee to receive the
share of distributions of the Company to which its predecessor in interest would
have been entitled; however, the assignee of the assigned Interest shall not be
entitled to exercise any rights of a Member of the Company, including without
limitation the right to vote or consent with respect to any proposed action of
the Company as to which such vote or consent is required, unless and until the
assignee is admitted as a substituted Member. From and after the assignment of
any Interest or portion thereof, the assignor shall not be entitled to exercise
any rights of a Member of the Company in respect of the Interest or portion
thereof assigned, including without limitation the right to vote or consent with
respect to any proposed action of the Company, regardless of whether its
assignee becomes a substituted Member. An assignee of a Member's Interest who
does not become a substituted Member as provided herein and who desires to make
a further assignment of its Interest shall be subject to all of the provisions
of this Article VII to the same extent as any Member desiring to make an
assignment.
(c) In addition to the foregoing requirements, the admission
of an assignee as a substituted Member shall be conditioned upon the assignee's
written acceptance of the terms and provisions of this Agreement and its written
assumption of the obligations hereunder of its assignor. Whether or not a
transferee who acquired any Interest in the Company has accepted in writing the
terms and provisions of this Agreement and assumed in writing the obligations
hereunder of its predecessor in interest, such transferee shall be deemed, by
the acquisition of such Interest, to have agreed to be subject to and bound by
all the obligations of this Agreement with the same effect and to the same
extent as any predecessor in interest of such transferee.
(d) All costs incurred by the Company in connection with the
admission to the Company of a substituted Member pursuant to this Article VII
shall be borne by the transferor Member (and if not timely paid, by the
substituted Member), including, without limitation, costs of any necessary
amendment hereof, filing fees, if any, and reasonable attorneys' fees.
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SECTION 7.2. ADDITIONAL RESTRICTIONS. Anything contained in the
foregoing provisions of this Article VII expressed or implied to the contrary
notwithstanding:
(a) In no event shall a sale, transfer, assignment, exchange,
or other disposition of any Member's Interest take place if such sale transfer,
assignment, exchange, or other disposition would, in the opinion of tax counsel
to the Company, cause a termination of the Company within the meaning of Section
708 of the Code.
(b) The Members may, in addition to any other requirement that
the Members may impose, require as a condition of any sale, transfer,
assignment, exchange, or other disposition of any Interest in the Company that
the transferor furnish to the Company an opinion of counsel satisfactory (both
as to such opinion and as to such counsel) to counsel to the Company that such
sale, transfer, assignment, exchange, or other disposition complies with
applicable federal and state securities laws.
(c) Any sale, transfer, assignment, exchange, or other
disposition in contravention of any of the provisions of this Article VII shall
be void and ineffectual and shall not bind or be recognized by the Company.
ARTICLE VIII
DISTRIBUTIONS
SECTION 8.1. DISTRIBUTIONS. If at any time and from time to
time (other than in connection with the dissolution and termination of the
Company pursuant to Article X) the Board determines that the Company has cash
that is not required for the operations of the Company, the payment of
liabilities or expenses of the Company, or the setting aside of reserves to meet
the anticipated cash needs of the Company, the Board shall distribute all or any
portion of that excess cash to the Members in proportion to their Percentage
Interests.
SECTION 8.2. RESTRICTED DISTRIBUTIONS. The Company, and the
Board on behalf of the Company, shall not be required to make a distribution to
any Member on account of its Interest if and to the extent that such
distribution would violate (i) Section 18-607 of the Delaware Act, (ii) Section
2.4(d) of the MMT License Agreement, or (iii) other applicable law.
ARTICLE IX
ALLOCATIONS OF PROFITS AND LOSSES
SECTION 9.1. ALLOCATIONS OF PROFITS. Except as provided in Section 9.4,
all net profits and credits of the Company (for both accounting and tax
purposes) for each Fiscal Year shall be allocated to the Members from time to
time (but no less often than annually and before making any distribution to the
Members) in proportion to their Percentage Interests.
SECTION 9.2. ALLOCATIONS OF LOSSES. Except as provided in Section 9.4,
all net losses of the Company for each Fiscal Year (for both accounting and tax
purposes) shall be allocated to the
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Members from time to time (but no less often than annually and before making any
distribution to the Members) in proportion to their Percentage Interests.
SECTION 9.3. CALCULATION OF PROFITS AND LOSSES. For all purposes
hereof, the Company's profits and losses shall be determined by taking into
account all of the Company's items of income and gain (including items not
subject to federal income tax) and all items of loss, expense, and deduction, in
each case determined under federal income tax principles. For both accounting
and tax purposes, the books and records of the Company shall be kept on the
accrual method of accounting applied in a consistent manner.
SECTION 9.4. SECTION 704(C) OF THE CODE AND CAPITAL ACCOUNT REVALUATION
ALLOCATIONS. The Members agree that to the full extent possible with respect to
the allocation of depreciation, amortization or any other cost recovery
deduction, loss and gain, solely for federal income tax purposes, Section 704(c)
of the Code shall apply with respect to non-cash property contributed to the
Company by any Member. Accordingly, (i) if the tax basis of any property
contributed differs from its agreed fair market value for purposes of
determining Capital Accounts (the "Section 704(c) Difference"), on the sale of
all or a portion of such property, any tax gain or loss resulting, up to the
dollar amount of the Section 704(c) Difference as adjusted by any prior
allocations under this clause (i) and prior allocations of depreciation,
amortization or other cost recovery deduction as provided under clause (ii)
below, shall be specially allocated to the contributing Member; and (ii), to the
extent of the Section 704(c) Difference, any remaining tax depreciation,
amortization or other cost recovery deductions with respect to such property
shall, for each Fiscal Year, be specially allocated to the other Members, up to
an amount equal to the amount of depreciation, amortization or other cost
recovery deductions with respect to such property allocated to such other
Members for purposes of determining Capital Accounts, and the balance of such
tax depreciation, amortization or other cost recovery deduction with respect to
such property shall be allocated to the contributing Member, and the Section
704(c) Difference shall be reduced by an amount equal to the difference between
the amount of tax depreciation, amortization or other cost recovery deduction
with respect to such property for such Fiscal Year so allocated to the Members
and the amount allocated to the Members for purposes of determining Capital
Accounts. For purposes hereof, any allocation of income, loss, gain or any item
thereof to a Member pursuant to Section 704(c) of the Code shall be for income
tax purposes only and shall not affect its Capital Account in the Company. In
addition to the foregoing, if Company assets are reflected in the Capital
Accounts of the Members at a book value that differs from the adjusted tax basis
of such assets (e.g., because of a revaluation of the Members' Capital Accounts
under Treasury Regulations 1.704-l(b)(2)(iv)(f)), allocations of depreciation,
amortization, or other cost recovery deduction, income, gain or loss with
respect to such property shall be made among the Members in a manner consistent
with the principles of Section 704(c) of the Code and this Section 9.7.
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ARTICLE X
DISSOLUTION AND WINDING UP
SECTION 10.1. GENERAL.
(a) The Company shall be dissolved and its affairs shall be
wound up:
(i) upon the expiration of the term of the Company as
set forth in Section 2.5;
(ii) in the event of the Bankruptcy of MMT or the MMT
Subsidiary, upon the written election by the LMC Subsidiary,
in its sole and absolute discretion, within ninety (90) days
of such Bankruptcy to dissolve the Company;
(iii) in the event of the Bankruptcy of LMC or the
LMC Subsidiary, upon the written election by the MMT
Subsidiary, in its sole and absolute discretion, within ninety
(90) days of such Bankruptcy to dissolve the Company;
(iv) in the event of any material breach of any
provision of this Agreement by the LMC Subsidiary or the MMT
Subsidiary, any material breach of Section 11.3 of the Master
Restructuring Agreement by LMC or MMT or any material breach
of the MMT License Agreement by the Company, LMC or MMT, and
the failure to cure such breach within ninety (90) days after
receipt of notice of such breach from the non-breaching party,
upon the subsequent election to dissolve by the LMC Subsidiary
(in the case of a breach of this Agreement by the MMT
Subsidiary, a breach of Section 11.3 of the Master
Restructuring Agreement by MMT or a breach of the MMT License
Agreement by MMT) or by the MMT Subsidiary (in the case of a
breach of this Agreement by the LMC Subsidiary, a breach of
Section 11.3 of the Master Restructuring Agreement by LMC or a
breach of the MMT License Agreement by the Company or LMC)
made within thirty (30) days after the end of such ninety (90)
day cure period;
(v) upon the unanimous written consent of the Members
pursuant to Section 5.14(a)(vii); or
(vi) upon the entry of a decree of judicial
dissolution pursuant to Section 18-802 of the Delaware Act.
(b) (i) Upon dissolution of the Company, the business of the
Company shall continue for the sole purpose of winding up its
affairs. The winding up process shall be carried out by the
Board unless the Members (including any Member that is the
subject of a Bankruptcy as provided in Section 10.1(a)(ii) or
(iii) and a breaching Member as provided in Section
10.1(a)(iv)) unanimously agree to appoint a liquidating
trustee (the Board or such liquidating trustee, as the case
may be, being referred to herein as the "Liquidator"). In
winding up the
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Company's affairs, every effort shall then be made to dispose
of the assets of the Company in an orderly manner, having
regard to the liquidity, divisibility and marketability of the
Company's assets and consistent with the considerations set
forth in paragraph (ii) of this subsection (b). If the
Liquidator determines that it would be imprudent to dispose of
any non-cash assets of the Company, such assets may be
distributed in kind to the Members, in lieu of cash,
proportionately to their rights to receive cash distributions
hereunder; provided, that the Liquidator shall in its sole
discretion determine the relative shares of the Members of
each kind of those assets that are to be distributed in kind.
The Liquidator shall not be entitled to be paid by the Company
any fee for services rendered in connection with the
liquidation of the Company, but shall be reimbursed by the
Company for all third-party costs and expenses incurred by it
in connection therewith and shall be indemnified by the
Company with respect to any action brought against it in
connection therewith by applying, mutatis mutandis, the
provisions of Article XII.
(ii) In winding up the business of the Company, the
Liquidator shall wind up the Company in an orderly and prudent
manner consistent with the Company's then-existing obligations
(including with respect to developed CEP Plants or other
projects) and the Company's pending and prospective projects,
with the goals of fulfilling the Company's contractual
obligations, protecting customer goodwill and assuring
customer service, limiting any residual liability to the
Members and effecting a division of assets consistent with the
relative Capital Account balances of the Members. The Members
may elect to wind up the relationship contemplated by this
Agreement by causing the sale by one Member of its Interest or
one or more CEP Plants or other projects owned by the Company
or sublicensed by the Company to the other Member.
(c) The occurrence of the Bankruptcy of a Member shall not
cause a Member to cease to be a member of the Company, and,
except as expressly provided in Section 10.1(a)(ii), (iii),
(iv) or Section 10.1(b), upon the occurrence of such an event,
the business of the Company shall be continued without
dissolution.
SECTION 10.2. APPLICATION AND DISTRIBUTION OF COMPANY ASSETS. The
assets of the Company in winding up shall be applied or distributed as follows:
first, to creditors of the Company (including Members that are creditors),
whether by payment or the making of reasonable provision for the payment
thereof, and including any contingent, conditional and unmatured liabilities of
the Company, taking into account the relative priorities thereof, and second, to
the Members in proportion to their respective Percentage Interests. A reasonable
reserve for contingent, conditional and unmatured liabilities in connection with
the winding up of the business of the Company shall be retained by the Company
until such winding up is completed or such reserve is otherwise deemed no longer
necessary by the Liquidator.
SECTION 10.3. CAPITAL ACCOUNT ADJUSTMENTS. For purposes of determining
a Member's Capital Account, if, on liquidation and dissolution of the Company,
some or all of the assets of the Company are distributed to the Members in kind,
Company profits (or losses) shall be
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increased by the profits (or losses) that would have been realized had such
assets been sold for their respective fair market values on the date of
dissolution of the Company, as determined by the Liquidator. Any such increase
pursuant to the preceding sentence (i) shall be allocated to the Members in
accordance with Article IX, and (ii) shall increase (or decrease) the Members'
Capital Account balances accordingly.
SECTION 10.4. TERMINATION OF COMPANY. The Company shall terminate when
all assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Members in the manner provided for in this Article X, and the Certificate shall
have been canceled in the manner required by the Delaware Act.
ARTICLE XI
BOOKS, RECORDS AND ACCOUNTING
SECTION 11.1. COMPANY BOOKS OF ACCOUNT. The Board shall cause to be
entered in appropriate books, kept at the Company's principal place of business,
all transactions of or relating to the Company. Each Member shall have access to
and the right, at such Member's sole cost and expense, to inspect and copy such
books and all other Company records during normal business hours; provided that
the inspecting Member shall be responsible for any out-of-pocket costs or
expenses incurred by the Company in making such books and records available for
inspection. The Board shall not have the right to keep confidential from the
Members any information that the Board would otherwise be permitted to keep
confidential pursuant to Section 18-305(c) of the Delaware Act.
SECTION 11.2. DEPOSITS OF COMPANY FUNDS. All funds of the Company shall
be deposited in the Company's name in such checking, money market, or other
account or accounts as the Board may from time to time designate; withdrawals
shall be made therefrom on such signature or signatures as the Board shall
determine.
SECTION 11.3. FINANCIAL STATEMENTS; REPORTS TO MEMBERS. The Board shall
cause the Company, at its cost and expense, to prepare and furnish to each of
the Members, within ninety (90) days after the close of each Fiscal Year,
audited financial statements of the Company, and all other information necessary
to enable such Member to prepare its tax returns, including, without limitation,
from time to time a statement showing the balance in such Member's Capital
Account as of the close of such Fiscal Year, and changes therein during such
Fiscal Year.
SECTION 11.4. TAX MATTERS PARTNER. The LMC Subsidiary shall be the tax
matters partner of the Company within the meaning of Section 6231(a)(7) of the
Code. However, as the tax matters partner, the LMC Subsidiary shall not make any
filing with the Internal Revenue Service or other tax authority, settle any tax
matter, make any election (including but not limited to elections relating to
depreciation and elections pursuant to Section 754 of the Code) or take any
other action that could have an effect on any other Member, without the prior
written consent of each other Member. The tax matters partner shall not be
entitled to be paid by the Company any fee for services rendered by it in
connection with any tax proceeding, but shall be reimbursed by the Company for
all out-of-pocket costs and expenses incurred by it in connection with any
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such proceeding and shall be indemnified by the Company with respect to any
action brought against it in connection with the settlement of any such
proceeding by applying, mutatis mutandis, the provisions of Article XII.
SECTION 11.5. TAX CLASSIFICATION. It is the intention of the Members
that the Company be classified as a partnership for federal income tax purposes,
and the provisions of this Agreement shall be interpreted in a manner consistent
with such intention. No election shall be filed by or on behalf of the Company
to have the Company classified as other than a partnership for federal tax
purposes without the prior unanimous consent of all Members.
ARTICLE XII
LIABILITY, EXCULPATION AND INDEMNIFICATION
SECTION 12.1. LIABILITY. Except as otherwise provided by the Delaware
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Covered Person shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Covered Person.
SECTION 12.2. EXCULPATION.
(i) No Covered Person shall be liable to the Company or any
other Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably believed
to be within the scope of authority conferred on such Covered Person by
this Agreement, except that a Covered Person shall be liable for any
such loss, damage or claim incurred by reason of such Covered Person's
gross negligence or willful misconduct.
(ii) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such information,
opinions, reports or statements presented to the Company by any Person
as to matters the Covered Person reasonably believes are within such
other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Company, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
SECTION 12.3. DUTIES AND LIABILITIES OF COVERED PERSONS.
(i) To the extent that, at law or in equity, a Covered Person
has duties (including fiduciary duties) and liabilities relating
thereto to the Company or to any other Covered Person, a Covered Person
acting under this Agreement shall not be liable to the Company or to
any other Covered Person for its good faith reliance on the provisions
of this Agreement. The provisions of this Agreement, to the extent that
they restrict the
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duties and liabilities of a Covered Person otherwise existing at law or
in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Covered Person.
(ii) Unless otherwise expressly provided herein, (a) whenever
a conflict of interest exists or arises between Covered Persons, or (b)
whenever this Agreement or any other agreement contemplated herein or
therein provides that a Covered Person shall act in a manner that is,
or provides terms that are, fair and reasonable to the Company or any
Member, the Covered Person shall resolve such conflict of interest,
taking such action or providing such terms, considering in each case
the relative interest of each party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and
burdens relating to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting practices
or principles. In the absence of bad faith by the Covered Person, the
resolution, action or term so made, taken or provided by the Covered
Person shall not constitute a breach of this Agreement or any other
agreement contemplated herein or of any duty or obligation of the
Covered Person at law or in equity or otherwise.
(iii) Whenever in this Agreement a Covered Person is permitted
or required to make a decision (a) in its "discretion" or under a grant
of similar authority or latitude, the Covered Person shall be entitled
to consider such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Company or
any other Person, or (b) in its "good faith" or under another express
standard, the Covered Person shall act under such express standard and
shall not be subject to any other or different standard imposed by this
Agreement or other applicable law.
SECTION 12.4. INDEMNIFICATION. To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered Person by reason
of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company and in a manner reasonably believed to be within the
scope of authority conferred on such Covered Person by this Agreement, except
that no Covered Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Covered Person by reason of gross
negligence or willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 12.4 shall be provided
out of and to the extent of Company assets only, and no Covered Person shall
have any personal liability on account thereof.
SECTION 12.5. EXPENSES. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of an undertaking by or
on behalf of the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as authorized in
Section 12.4.
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SECTION 12.6. INSURANCE. The Company may purchase and maintain insurance, to the
extent and in such amounts as the Board shall, in its sole discretion, deem
reasonable, on behalf of Covered Persons and such other Persons as the Board
shall determine, against any liability that may be asserted against or expenses
that may be incurred by any such Person in connection with the activities of the
Company or such indemnities, regardless of whether the Company would have the
power to indemnify such Person against such liability under the provisions of
this Agreement. The Board and the Company may enter into indemnity contracts
with Covered Persons and adopt written procedures pursuant to which arrangements
are made for the advancement of expenses and the funding of obligations under
Section 12.5 and containing such other procedures regarding indemnification as
are appropriate.
SECTION 12.7.
*
ARTICLE XIII
MAINTENANCE OF SEPARATE BUSINESS
The Company shall at all times (a) maintain the Company's books,
financial statements, accounting records and other Company documents and records
separate from those of an Affiliate or any other Person, (b) not commingle the
Company's assets with those of any Affiliate or any other Person, (c) maintain
the Company's books of account, bank accounts and payroll separate from those of
any Affiliate, (d) act solely in its name and through its own authorized agents,
and in all respects hold itself out as a legal entity separate and distinct from
any other Person, (e) make investments directly or by brokers engaged and paid
by the Company or its agents (provided that if any agent is an Affiliate of the
Company, such agent shall be compensated at a fair market rate for its
services), (f) manage the Company's liabilities separately from those of any
Affiliate and pay the Company's own liabilities, including all administrative
expenses and compensation to employees, consultants or agents, and all operating
expenses, from its own separate assets, except that an Affiliate may pay (or
contribute funds to the Company to effect the Company's payment of) the
organizational expenses of the Company, and (g) pay from
--------
* Confidential treatment has been requested for this portion of Exhibit 10.1.
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the Company's assets all obligations and indebtedness of any kind incurred by
the Company. The Company shall abide by all limited liability company
formalities as required under the Delaware Act, including the maintenance of
current records of Company affairs, and the Company shall cause its financial
statements to be prepared in accordance with generally accepted accounting
principles (except to the extent such principles are inconsistent with Section
9.6) in a manner that indicates the separate existence of the Company. The
Company shall (i) pay all its liabilities, and (ii) not assume the liabilities
of any Affiliate.
ARTICLE XIV
INDEMNIFICATION RELATING TO CHEM DEMIL PLANTS
SECTION 14.1. INDEMNIFICATION. The Company agrees to indemnify and hold MMT,
LMC, the LMC Subsidiary and the MMT Subsidiary and their directors,
stockholders, officers and employees (also referred to herein as "Indemnitees")
harmless from and with respect to any and all claims, liabilities, losses,
damages, costs and expenses, including without limitation the reasonable fees
and disbursements of counsel (collectively, the "Losses") relating to or arising
directly or indirectly out of any action, suit, proceeding or demand against any
Indemnitee by any third party related to the ownership, construction, start-up
or operation of any CEP Plant or other facility developed by the Company or any
sublicensee of the Company (a "Third Party Claim"), including any claim against
an Indemnitee as a supplier of goods or services to the Company or any claim
against MMT in its capacity as licensor to the Company pursuant to the MMT
License Agreement.
*
The Company shall have the
obligation to take all actions reasonably necessary to oppose or defend any
Third Party Claim. In the course of defending any such Third Party Claim, the
Company shall consult with the Indemnitees in connection with all material
issues relating to such defense and shall consult the Indemnitees prior to
commencing the same and shall consider any recommendations by the Indemnitees
with respect to the conduct and settlement or compromise thereof and any
reasonable alternative resolutions of the Third Party Claim. In the event that
the Company does not undertake to oppose or defend any such action within ninety
(90) days after the Company becomes aware of such Third Party Claim, the
Indemnitees will have the right to undertake the defense of such claim. In the
event that an Indemnitee undertakes the defense of such claim, such Indemnitee
shall consult with the Company in connection with all material issues relating
to such opposition or defense and shall consult with the Company prior to
commencing the same and shall consider any recommendations by the Company with
respect to the conduct and settlement or compromise thereof and any reasonable
alternative resolutions of the Third Party Claim. If the Indemnitees undertake
to oppose or defend any Third Party Claim pursuant to the
--------
* Confidential treatment has been requested for this portion of Exhibit 10.1.
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procedure provided for in this Article XIV, the Company shall bear all costs of
such defense. Any indemnifications pursuant to this Article XIV shall be solely
out of the assets of the Company and shall not be a personal obligation of any
Member.
ARTICLE XV
GENERAL
SECTION 15.1. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
Related Agreements contain the sole and entire agreement of the parties hereto
and thereto with respect to the subject matter hereof and thereof. This
Agreement may only be changed or terminated by a written agreement signed by all
of the Members. No waiver of any provision of this Agreement shall be effective
unless evidenced by a written instrument signed by the waiving Member. The LMC
Subsidiary and the MMT Subsidiary further acknowledge and agree that, in
entering into this Agreement, they have not in any way relied upon any oral or
written agreements, statements, promises, information, arrangements,
understandings, representations or warranties, express or implied, not
specifically set forth in this Agreement or the Exhibits hereto or the Related
Agreements.
SECTION 15.2. BINDING AGREEMENT. The covenants and agreements herein
contained shall inure to the benefit of and be binding upon the parties hereto
and their respective successors in interest and permitted assigns.
SECTION 15.3 DISPUTES. Any disputes arising under this Agreement shall
be resolved in accordance with the provisions of the Dispute Resolution
Agreement.
SECTION 15.4. NOTICES. Any and all notices contemplated by this
Agreement shall be deemed adequately given if in writing and delivered in hand,
or upon receipt when sent by telecopy confirmed by one of the other methods for
providing notice set forth herein, or one (1) business day after being sent,
postage prepaid, by nationally recognized overnight courier (e.g., Federal
Express), or five (5) days after being sent by certified or registered mail,
return receipt requested, postage prepaid, to the party or parties for whom such
notices are intended. All such notices to Members shall be addressed to the last
address of record on the Company's books; all such notices to the Company shall
be addressed to the Company at the address set forth in Section 2.3 or at such
other address as the Board may have designated for the Company by notice given
in accordance with the terms of this Section 15.4.
SECTION 15.5. GOVERNING LAW, ETC. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware, all rights and remedies being governed by such laws, without regard to
its conflict of laws rules.
SECTION 15.6. WAIVER OF JURY TRIAL. EACH OF THE MEMBERS AND THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHTS THAT THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY
OF THE RELATED AGREEMENTS OR ANY
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COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF ANY OF THEM
RELATING THERETO.
SECTION 15.7. WAIVER OF CERTAIN DAMAGES. EACH OF THE MEMBERS AND THE
COMPANY, TO THE FULLEST EXTENT PERMITTED BY LAW, IRREVOCABLY WAIVES ANY RIGHTS
THAT THEY MAY HAVE TO PUNITIVE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN
RESPECT OF ANY LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY
RELATED AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR
ACTIONS OF ANY OF THEM RELATING THERETO.
SECTION 15.8. EXCLUSIVE JURISDICTION. The parties hereto hereby agree
to the exclusive jurisdiction of state and federal courts located in the State
of Delaware to resolve all disputes relating to the Company, this Agreement or
any Related Agreement.
SECTION 15.9. NO IMPLIED RIGHTS OR REMEDIES. Except as otherwise
expressly provided herein, nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any Person, except the Members, any
rights or remedies under or by reason of this Agreement.
SECTION 15.10. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 15.11. CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
SECTION 15.12. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement or any Related Agreement shall not affect
the other provisions hereof or thereof, and this Agreement shall be construed in
all respects as if such invalid or unenforceable provision were omitted.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of June 16, 1997.
MEMBERS:
MMT FEDERAL HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
LOCKHEED ▇▇▇▇▇▇ ADVANCED
ENVIRONMENTAL SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
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